Leeds United’s 49ers takeover latest: Companies House update, new board structure and share status — The Athletic 17/10/23
By Phil Hay
No takeover of a British football club is truly complete
until a tranche of documents lands at Companies House.
Control of Leeds United switched from Andrea Radrizzani to
49ers Enterprises in July, but it was only last week, two months later, that
Companies House (the UK’s register of companies) published the details of
changes to the boardroom at Elland Road. For the first time, the paperwork
gives a clearer picture of how Leeds will be run and controlled.
Leeds, in reality, have been owned and managed by 49ers
Enterprises since July 17, when the EFL approved a buy-out which valued United
at £170million ($207m). But the completion of formalities and final payments,
the last parts of which were wrapped up towards the end of September, prompted
confirmation of the shift in power: who is joining the board, who is leaving
the board and what the transition means for things like the club’s Elland Road
stadium.
The Athletic has put together an explainer of the latest
documents issued on the Companies House website.
How is the new Leeds United board structured?
Leeds gave a strong indication of how their new board would
look when the takeover was first announced. Paraag Marathe, previously vice
chairman while Radrizzani was head of the board, took up the position of
chairman midway through the summer. He has been in charge of the management of
Leeds from that day.
U.S. entrepreneur Rudy Cline-Thomas, one of the biggest
investors in the 49ers’ group, became vice chairman at the same time, an
appointment which Companies House officially confirmed last Thursday. He and
Marathe have been present at league games this season, though both will continue
to be based in the U.S.
Chief executive Angus Kinnear was an existing director and
remains in place, as does Australian businessman Peter Lowy — a United director
since 2021. The 49ers had discussed adding a fifth member to the board in the
form of Collin Meador, the existing vice president of 49ers Enterprises and a
colleague of Marathe’s for many years. Meador, however, will not be taking up a
position as a Leeds director.
Of the four board members, Kinnear is the only director who
will be situated in the UK full-time. He has the job of overseeing day-to-day
operations at Elland Road, reporting directly to Marathe above him.
How 49ers Enterprises has restructured Leeds United
hierarchy
Which club directors have resigned?
Radrizzani, as expected, has left his position as a director
and ended his association with Leeds completely. He has not had any tangible
involvement at Elland Road since the end of last season and his exit from the
board was finalised on September 25.
For a while, it was thought possible that he might
relinquish control of United while retaining a very small shareholding, but the
relationship between him and 49ers Enterprises was strained towards the end,
not helped by the revelation that Elland Road had been put forward as potential
collateral for a bank loan, which an investment group including Radrizzani
needed to buy Sampdoria in Italy.
When it came to the crunch, the American group were clear
that he should sever ties completely. In all, Radrizzani was chairman, director
and majority shareholder of Leeds for six full seasons. His sale marks the
fifth full change of ownership at Leeds since January 2005.
Also gone from the boardroom is Massimo Marinelli, a
long-time friend and colleague of Radrizzani’s and the CEO of Radrizzani’s Aser
Ventures investment firm. Marinelli joined United as a director in June 2021,
along with Lowy and Italian businessman Sandro Mencucci. Mencucci, a
62-year-old sports executive who was once CEO at Fiorentina, has followed
Marinelli in resigning his Leeds directorship. He and Marinelli were very much
in the background for the past two years, away from the public eye.
What is the status of shares in Leeds United Football Club
Ltd?
Prior to Radrizzani selling United, the split of shares
between him and 49ers Enterprises was roughly 56-44 per cent in the Italian’s
favour. The 49ers’ stake — increased incrementally from 2018 onwards — was held
across two different U.S. companies: 49ers Enterprises Leeds II SPV and
Football Investment Fund. Radrizzani had himself acquired a 100 per cent stake
in United from Massimo Cellino in 2017.
Companies House is yet to publish a new confirmation
statement explaining the new structure of shareholding, but when the documents
drop, they are expected to show that 49ers Enterprises holds the entire
shareholding in the club, with no splits or minority stakes.
It is well known that the 49ers’ fund consists of various
high-worth individuals, such as Cline-Thomas and Lowy, whose personal
investments made the takeover possible. Multiple interests and personalities
were involved in financing the deal, but on paper, 49ers Enterprises now owns
Leeds United in its entirety.
How has the ownership status of Elland Road changed?
Leeds’ Elland Road stadium is in the hands of a company
called Elland Road Ltd, set up in December 2020 (around the time 49ers Enterprises
substantially increased its stake in United for the first time). Ownership of
the ground transferred to Elland Road Ltd having first been bought by another
Radrizzani company, Greenfield Investment Pte, after his original takeover of
Leeds in 2017.
Until 49ers Enterprises secured its takeover, the Americans
controlled a minority stake in the stadium — below 30 per cent — with
Radrizzani retaining 71 per cent. As yet, there are no updates on Companies
House about a change of ownership, but the 49ers’ buy-out of Radrizzani
included an agreement for the group to acquire 100 per cent of Elland Road and
sources with knowledge of the deal — speaking anonymously to protect
confidentiality agreements — have told The Athletic that the handover is due to
be registered at Companies House in the near future.
Elland Road Ltd had four directors: Radrizzani, Kinnear,
Meador and Marinelli. As with Leeds, Radrizzani and Marinelli are expected to
relinquish those positions as control of the ground moves into the 49ers’
hands. The most recent accounts for the firm, covering the 2021-22 financial
year, show that Elland Road is valued at £25million and that Leeds paid just
over £1.7million in rent during that 12-month period. After his purchase of the
ground, Radrizzani granted the club a rent-free spell spanning 33 months, but
that arrangement expired around the time of their promotion to the Premier
League in 2020.
From the start of 2021, 49ers Enterprises has held a charge
over Elland Road — in effect, security for what was most likely a loan given to
Radrizzani or Leeds. The latest accounts show that, as of June 2022, United
owed £1million to shareholders of Elland Road Ltd. That charge might be settled
as part of the change of stadium ownership and, at the time of writing, no
others are registered at Companies House.
Any other business?
On the pitch, the 49ers’ first priority is to see Leeds
promoted — and this season has not started at all badly (Leeds are currently
fifth in the table). Off the pitch, the group are hopeful of pushing forward
with stadium development plans before the season ends, helped by the fact they
succeeded in pushing for sole ownership of the club and Elland Road.
At present, United are advertising key scouting jobs and
looking for other first-team support staff and changes to the internal
framework are unlikely to slow down. At senior management level, the
appointment of a chief operating officer (COO) is in the pipeline, a move that
will give the 49ers more oversight of the business.
The 49ers’ impression of Leeds is that, while they were a
Premier League team for three straight seasons, too much of the infrastructure
is still Championship-level. The aim will be to ensure that if and when Premier
League status is regained, the club have the tools, personnel and wit to stay
there.
M G.
There are two important aspects here, plus something not
referenced in this article, that matter. The first is that finally the language
around the 49ers ownership reflects reality, it’s a stand alone, for profit,
fund with a finite investment pot that is in the lower hundred millions, one of
a series of independent investment pots using 49ers Enterprises branding.
Chances are this pot is about half of what Chelsea have spent in the last year on
players (with most of the fund for non-footballing expenditure which we will
come to). We are not in the rich Yank owners club and that has already shown in
some of the decisions taken since July. Second is the structure of the board
which frankly is a bit depressing. It contains no non- executive directors, has
a club employee as the only UK based member and clearly has no intention of
having any supporter or local business input. Reaching out seems to be an issue
which is a missed opportunity (but not unexpected given our present CEO has the
same opinions on the sanctity of the board room as Shaun Harvey had). The
biggest voice in the room is Lowy and he ain't in it for the football. Which
brings us to the unstated part. The fund is an investment opportunity around
property development not one around sporting success. The money from any return
to the PL (presently unlikely in 24-25 despite Farke's best efforts) isn't why
the pot was created and ownership of the club secured. No the opportunity is
about the land around Elland Road, some club owned, some not, and the prospect
of various developments over the next 15-20 years. Some will include
redevelopment of the ground but most won't. We can anticipate a separate
development company being created, of which the club entity will be a minor
partner but one of it's board members will own the major partner. If you like
flats, shared accommodation for students and young professionals, urban village
shopping, transportation hubs and serviced office accomodation Beeston and
"Holbeck Reach" will be the place to be. None of this is dodgy or
frankly unusual but it needs stating, Leeds United is being used as a vehicle
for profit by urban regeneration specialists to generate returns on investment
for board members and pot investors. Now you will note I'm mostly not
indicating whether it's a bad thing or a good thing (a restraint that is quite
difficult whilst Mr Dicking Continuity stays with us), to be brutal there are
so many variables that could cause issues with the new club owners masterplan
to be certain one way or the other, but what I do say is you would be very naive
to believe all that is to come is exclusively in the best interests of the
club.
@M G. Funds have capital calls, meaning more money goes in
future years. What a simplistic and uninformed viewpoint that reflects a lack
of knowledge of private equity investing. Yes, Leeds is owned by a fund.
Liverpool is owned by a fund. Somehow the football gets played just fine.
Leon G.
@M G. I really don’t think that already very wealthy
individuals such as Lowy need to find a big fat piece of run down land in
Beeston, LS11 (with all the headaches of running a football club) to make
themselves even richer! They could find that kind of thing almost anywhere in
the world! These guys are in it to make Leeds Utd successful and firstly to get
us back into the Premier League and establish us there. The fact that they’ll
make profit from it is a completely normal thing and I don’t see why anyone
would have a problem with that? The more successful Leeds Utd are, the more
money they’ll make, and they’ll be able to sell the club for an extremely
healthy profit to those who have deeper pockets in terms of Football finance
etc. The redevelopment and expansion of Elland Road is well overdue and even
the most ardent and traditional Leeds United fan would agree.
Laurence L.
@M G. Your usual twisted view of life I see.
The proposals for the redevelopment of Elland Road look good
and will include:
1 A 150-room Hotel built into the new North Stand.
2 A Casino, health Club and 12,500 seat Arena built with and
joined to a new West Stand
3 A food/retail plaza alongside the East Stand
4 A transport hub on the East side linked to park-and-ride
facilities for buses and coaches
5 2,700+ car parking spaces wrapping around the North and
West of the stadium.
Additionally, there are plans for a new Police HQ and 179
houses and 108 apartments to the West and South of the complex respectively.
So now we have the question as to how that is funded and
developed. There are two options:
1 Through the football club a la Arsenal. Impacting the spending
decisions made by the club over several seasons. The counter to that is that
they benefit from the future income streams that come in from the casino, arena
etc.
2 Through a separate investment vehicle in which the club
has a limited liability solely for the improvements to the stadium. They don't
benefit from future income streams though.
Which of these two the members of 49ers Enterprises use,
will also depend on how they want to get their returns from the investment. The
first option will defer profits in their investment until the club is finally
sold. The second will allow them to take profits in stages for some bits of the
development.
